Begbies Traynor Share Discussion Threads

[c1d] 01/7/2013 07:22

Thanks daneswooddynamo,
I found the article and it made interesting reading.

[daneswooddynamo] 30/6/2013 20:09

hmmm telegraph today reporting insolvency rates starting to accelerate

[c1d] 28/6/2013 11:00

dashton42,
Most if not all of Begbies assignments will be minnows compared to the insolvencies that get reported nationally as this is the sector of the market where they operate. The Big 4 accountancy firms plus some others always seem to handle the big ticket jobs.
Regards

[dashton42] 28/6/2013 10:36

I'm not a BEG holder, just debating dipping a toe. Agree with your analysis, for what it's worth, bottomfisher. On the other hand, as I speculated before, IF the results are in-line, IF the divi is maintained, and IF the outlook is in any way, shape, or form even vaguely optimistic, then there has to be value here, as I think you suggest.

It was heartening to see the recent newsflow re. insolvencies, even if they are minnows. At least it could indicate that things might now be starting to pick up.

[c1d] 28/6/2013 10:35

Bottomfisher,
Personally, I don't worry about the lack of institutional interest. Management hold about 30% and BEG has a small market cap so it would be difficult for an institution to acquire a meaningful stake unless they could find a willing seller holding a large block of shares. In the interests of balance I also think it would be even more difficult for an institution to sell if need ever arose.
Also, it seems to me that most institutions are more interested in short to medium term momentum trading not long term value investing whatever their marketing blurb says and the share chart of Begbies doesn't give them a lot to excited about in that department.
I'm not expecting great things from Begbie's results but am happy to hold while waiting for their markets to pick up as I haven't found any other investments with better long term prospects.

[rotors] 28/6/2013 10:34

B'fisher - maybe management need the income. There is precious little else around that pays any more.

But I agree - something is out of kilter here. Two things can happen to bring the (basically very good fundamentals) into alignment: a cut in yield, or a re-rating upwards of current share price.

Hopefully, next week's figures will result in the latter.

[bottomfisher] 28/6/2013 10:00

Given the surprisingly depressed state of the insolvency market, it is hard to see how BEG can suprise on the upside when it releases its results next Wednesday.

The key will be the dividend. Why should management, who have a large stake in the business, continue to maintain it given the share's current lowly rating?

The continued lack of disclosed share stakes by well-known institutional shareholders on BEG's share register makes me wonder why this high yielding share is not a staple in the portfolio of income funds. Given that institutions have much easier access to management and broker research than us ordinary punters, their apparent lack of interest makes me nervous.

If Beg holds its dividend next week, its shares would seem to deserve a re-rating.

[bonio10000] 27/6/2013 13:33

Small fry other than potentially the last one.

[dashton42] 27/6/2013 12:29

BEG seems to be picking up quite a bit of insolvency work, according to recent news reports:



and:



and:

[dashton42] 18/6/2013 15:37

Thanks for the analysis. I had a skim through the recent RNS's myself, and did think that pretty much all the bad news must have already been flagged, and that any in-line results (in the absence of a prior profit warning, as you say asagi), coupled with maybe a touch more optimism in the outlook, might cause a re-evaluation of the company and an uplift in the share price

The fundamentals, leaving aside the disappointing insolvencies market (which surely has to turn, sooner or later), just look so tempting to me - assuming that the divi is maintained.

Hmmm....

[asagi] 18/6/2013 11:35

The company's year ended in April. At that point, 5.65p of EPS (from -) was expected, with a dividend of 2.2p.

The latest data suggests that 5.4p of EPS is expected for the year. Begbies would have had to profit warn if the expected outcome was signficantly worse. They have not.

So, this suggests that we should still be on course for a minimum of 5.1p per share of EPS with July's results, i.e. a P/E of 5.9 for anyone buying today at 30p.

Notice that the recent slide has not been in the face of any announcement from the company. It is worth looking again at the last thing that they said:
"The Board's expectations for the year as a whole remain unchanged. This remains dependent on trading in our important final quarter, supported by lower cost comparatives following cost saving initiatives over the last two financial years."

Results will be announced on July 3rd i.e. a couple of weeks away. Of course, the outlook statement is a worry but it appears that we may be at a cyclical low for insolvencies.

Asagi (long BEG)

[outsizeclothes.com] 18/6/2013 11:27

If these upcoming results can establish Begbies divvy as a reliable ongoing source of income, along with being able to continue slowly paying down debt, I think you'll see a return of investors. Both divvy reliability, and ability to pay down debt in tandem are just too uncertain at this moment. IMHO

[c1d] 18/6/2013 11:19

I have no special insight but my gut feel is that people are expecting flat to maybe mildly negative results because all the coverage of the insolvency market shows that conditions remain tough. This must make things difficult for Begbies too.
I remain a holder because I think that there will be an increase in insolvencies to more normal levels at some point in the future (as I have posted here several times). But I cannot predict when this will be. My guess is that other holders have left Begbies for other shares where there is more chance of a quicker pay back. That is my opinion - I will also be interested in others views.

[dashton42] 18/6/2013 10:30

Hi All. I don't hold BEG, but I have been keeping a bit of an eye on it, with a view to a possible purchase.

I notice (hard not to) that it's taken a bit of a tumble in advance of the forthcoming results, but am not sure if this is due to rumours of tough times being experienced by the co., i.e. even more so than was already known about due to the effect of the economic crisis on this company's business model.

Does anyone have any insights, or gut feelings, in advance of the results, whch might explain the disappointing recent share price performance?

Thanks in advance!

[bsharman3] 13/6/2013 10:34

Hi c1d.

Thanks for the reply. As a holder of BEG I agree that it is a matter of when rather than if and business will start to pick up once interest rates start to rise. As you say they pay a nice dividend whist we wait!

[c1d] 12/6/2013 16:59

bsharman3,
Not a stupid question at all!
Begbies (and other insolvency firms) were caught out by this recession being different to all those that have happened previously. They took on more staff to handle an expected sharp increase in administrations & insolvencies which never materialised in contrast to what has happened in previous recessions. Low interest rates and an unwillingness by the banks (under some political pressure) to bite the bullet on non-performing loans has meant that many companies that would have previously gone to the wall have been allowed to continue trading (often as long as they can service the interest on their loans). Begbies has been laying off staff in order to match its resources to demand.
Interestingly, historically there has been an increase in insolvencies when the economy starts improving as banks find they can get more money by selling assets on and so recover a greater % of their non-performing loans and businesses find they cannot fund the increased working capital requirements that comes with demand increases.
IMV it is only a matter of time before historic patterns re-assert themselves and there is an increase in insolvencies. But I wouldn't like to predict when this will happen. BEG is one of my larger holdings as I am convinced it is a matter of when rather than if and in the meantime BEG pays an excellent well-covered dividend.
Regards

[rotors] 12/6/2013 16:43

They do consultancy work as well; probably pays better. Broker recommendation out today (June 12th) BUY. (Company broker) Rgds.

[bsharman3] 12/6/2013 16:26

this may be a stupid question but why did BEGs business do so well during the boom years (when I would have thought that there would be less insolvencies) and so badly during the recession (when I would have thought that there would be more insolvencies) ?? I would have thought that the share price would be the reverse of what it actually is.... i.e. lows in 2007 and reaching highs today...

[zho] 24/5/2013 16:02

Thanks xdavid, I don't know I missed that.

[xdavid] 24/5/2013 15:25

It's in the main body...

"On a matter of house-keeping, I had to sell something to get the cash for Silverdell & other things I've bought recently, so reluctantly I've thrown in the towel on Begbies Traynor (LON:BEG). It's just taking too long, and with no sign of the insolvency market picking up for the foreseeable future, I've decided to put that money to use elsewhere."

Personally, I'm not a very 'active' investor so was happy to double up at recent lows and take the divis while we wait.

[zho] 24/5/2013 13:28

Hi Paul (if you're reading), in the header for you 21st May blog you say that you've sold your BEG but there's nothing in the main body of your article. Would it be possible to explain why? Thanks.

[asagi] 08/5/2013 16:23

Hi danger.

I've used a slightly different screen to give some others such as SDM, GDP, VNET, ISG, ABG etc.

And some of those we can discount such as ABM (profit warned).

Didn't post because I want this board to be for BEG discussion only.

BEG is very cheap indeed provided it did enough in 2013 to meet the forecasts.

Asagi (long BEG)

[dangersimpson2] 08/5/2013 13:42

Based on rolling figures s t o c k o p e d i a has just 11 - BEG, CUP, ABM, HAT, MGNS, POG, ACHL, TLPR, CLLN, PHNX, AV.

[mrwhits1] 08/5/2013 12:31

Begbies is one of just 15 UK-listed companies yielding more than 4.5% but with a P/E less than 7.5 times earnings

interesting....

care to divulge the other 14?

regards

[asagi] 08/5/2013 12:29

Begbies' year recently ended (April). Forecasts for the year just passed were EPS of 5.65p and dividends per share of 2.20p.

That's a 2013 P/E of 5.9, with a yield of 6.6% at today's price.

Begbies is one of just 15 UK-listed companies yielding more than 4.5% but with a P/E less than 7.5 times earnings.

Hopefully, final results in July will inspire the market to reprice the shares higher.

Asagi (long BEG)